WIN 8 - Should I Raise the Rent? and Investing in Real Estate with Hedge Funds and Other Investors with Darlene Coquerel

Welcome to win the Women Investing Network, the podcast where you can learn from successful entrepreneurs, business leaders and real estate investors who are winning in business and life. Learning from others is the fastest way to grow your skills, gain knowledge and avoid pitfalls so you can win. Join our hosts, Elizabeth Embry and Jason Hartman. Elizabeth is a seasoned real estate investor, experienced corporate executive and skilled mentor. Jason is a self made multimillionaire investor, entrepreneur and highly acclaimed thought leader. Together with their successful guests, you'll get the tools you'll need to win.

Welcome to another exciting episode of the Women Investing Network. I'm your co host, Elizabeth Embrey and this is episode number eight. Today's guest is Darlene Cockrell. I think the word that best describes her is badass. She is in many markets making a whole lot of money and doing a lot of deals in a lot of different areas. She's got a really interesting and compelling story and so I can't wait for you to hear that interview. But first I want to get into a question that is often asked, should I raise the rent? So if you have rentals, you know, every year you're faced with, if I have an existing tenant and they're good and I know they're going to stay, should I raise the rent on them or should I keep it as is? Should I keep it status quo? And this is a conversation you have to have with yourself whether you have property management team in place to help you with your properties or you are self managing. And so really there's some really basic questions that you have to know the answers to and a simple formula or process in which you can assess every time consistently whether you should raise the rent. So the first piece of information that you need to have is to get your baseline data. So, so what's your current rent, what are the comps in that area? And then what are the current known vacancy rates for like units? Now the reason why I call out like units is because a vacancy rate for a single family home that's a three bedroom, two bath house in a great neighborhood within a great school district is going to have different vacancy rate than for instance a studio apartment that's in a condo in a university setting, right? So you have to understand that a, you know, a 2% vacancy rate or a 5% vacancy rate for single family homes may have a 7% vacancy rate for studios, what have you. So you just really have to understand your own market. So once you have the comparables within your own market, the second question that you should be thinking about is how much is the new renter going to cost you. So you should understand a typical rent ready for your unit. So, so once you've gone through two or three vacancies within a for a unit, you'll know what your typical numbers are. I mean mine really depend on area and on type. And so I've had rent readies as few as a couple of hundred dollars and I've had unfortunately a couple of rent readies that are a few thousand dollars for a very large house. So it just really depends on, you know, the units you have, the location you have, the type of quality of renters that you're getting. But you should have those stats within your own data. If you aren't keeping your your own records and you have property management teams, then you can look at your back statements from your property management company or just engage them and start having a conversation about what a typical rent ready has been for your units. Not just their units in general, but your specific units also. How much does it cost you to screen and get that next tenant? So if you've got a property management team, they're going to charge you for instance, maybe a half a month for a new tenant lease up or maybe three quarters of a month. It really depends on the contract that you have in place with your property management team. If you're doing the screening yourself, depends on if you're using a lawyer to write up a lease or if you have some other resources. For instance, rental Housing association of Washington has some great lease lease forms that you can use. You may have your own boilerplate type form. So just depends on what your particular costs are for a lease up or a rent renewal. Lease renewal and then also what's the typical vacancy duration you're expecting. And so for instance, the last time I rented out that house, it took me four months to get a good tenant in place. Well, four months of cash flow could cost you your profit for the year. Conversely, hey, you know, I already have my other my next renter lined up because the market's so hot and that place is in such demand. Well then you know you're going to have very little vacancy money out of pocket. So you'll have the actual rent ready expenses. But you also have to factor the lack of cash flow that you have when you're getting it ready and then also the time for marketing, maybe your marketing costs as well as your expected vacancy. Keep in mind, your tenant has to give notice to their existing place if you find the right tenant, but they are not available to actually move in for a month and a half. That's something to factor in. So you just have to know the stats. Right. The third is how much do you actually want to raise the rent either by percentage or specific dollars. Is it in line with the perceived market value of that unit? So yeah, I want to raise the rent $300 a month. Well, that pushes that unit out of what is the norm or your competition in that market. That's not really a good number to go after. You really have to weigh that. The other thing is, legally, in some cities, there's a legal limit to how much of a percentage increase you can have, you know, within the city limits of some areas over a 12 month period. For instance, San Francisco has some of those restrictions, Seattle has some of those restrictions. So you really have to understand the local laws before you go raising the rent. Make sure that you really understand what you're allowed to do. Fourth consideration is how much would it cost the renter to move? So there's a time to find the new place to pack, to get a mover. Depending on how small the place may be, maybe they're getting friends that they're just going to get pizza and beer for, who knows, right? But they're going to have to have time and actual hard dollars in the move. Moving to a new place will also cost them money out of their savings. They're going to have to do some combination of the first and the last deposit. So first month's rent, last month's rent deposit, some combination. And so that's a chunk of savings for a lot of renters. Another thing is, do they have roommates, family members, or pets that complicate their ability to move easily? For instance, you know, do they have close proximity to stores or childcare or a specific school, school that they really like? This all plays into it. And so finally, once you have all this data, based on the application data that you had for that renter, you know, and their numbers aren't likely to move that much in a year. What is their credit score, what's their debt to income ratio? If you apply that new hire rate, would you still rent to that person? So you really need to understand, based on all of the financial data that you were given, would they really be the right choice for this place if you were to raise the rent? So you have all of this data and then you have to start calculating the risk and the reward. So for instance, if it's going to cost you $1,200 to get a rent ready to do the advertising to do the lease up, but you're thinking about raising it $100 a month. Well, you're only going to be gaining $1,200. So if they decide to move out and you rent the place with new higher rate, you're going to be breaking even. Is it really worth your time? Is it the right thing to do? And you know, there's no right answer. In general, there's a right answer for you. You just have to make that decision on your own. But you have to think through all of those factors in order to ensure that you're making the right next decision. The other thing that you need to be thinking about is can you make concessions? So for instance, I'm going to raise your rent $100 a month, but I'm going to give you a two year lease instead of a one year lease. And that way you're guaranteed to not have a rent increase after the end of this 12 months or 18 months or what have you. Right? So there's ways to make sure that you're in line appropriately with the market that you can get a higher rate in. But you might want to consider giving a concession to your renter. Be careful not to let emotions play into your decision. You bought that rental unit with your hard earned money to help propel you to your financial future. So it needs to be earning as much as possible while still falling within the marketplace norms. So make sure that you're not thinking about this as an emotional decision. Gosh, I really need more money, so I'm going to raise my rent so that I can pay off a bill or gosh, you know, I really don't like that renter anyway. So, you know, whatever it might be, you need to be thinking through this from a dollars and cents perspective and not an emotional perspective. So if you've got a property manager in place for your rentals, one of the things that you need to understand is not only your contract with the property management team, but also the leases that they have for your renters on the individual units. So for instance, some property managers, you know, state that they are trying to get rate increase every time the lease ends in hopes that they're going to get, you know, a higher rate for you. Others may have a contract with the renter that the lease, if they're not provided notice within a certain time, their lease is automatically renewed, but at the existing rate. So you need to understand what kind of contracts are in play both with yourself and with your renter. And then you need to make a decision on how you want to handle those conversations. So if you want to make sure that there's a conversation about a rent increase, you need to be tracking your own data about when those leases are ending. And be sure to have that conversation with your property manager. Keep in mind, your property manager is managing, you know, hundreds, if not thousands of various homes, apartment buildings, etc. And so they may not have your specific needs in mind when it comes to looking at the data. Make sure that you're proactively taking care of yourself by having those conversations with your property manager. Some property managers are loathe to increase the rent because they feel like it's going to drive churn for the renters. Some property managers are hungry for the rent to increase because they know that it'll increase their profitability and they think it's the right thing for you as an investor. Either way, make sure that you're armed with the information. I hope this helped. And now let's hear from our guest, Darlene Cockerel.

I'd like to introduce you to Darlene Coquerel, real estate broker and CEO of Key Properties and KTH Realty, where she and her team buy hundreds of houses each year, totaling tens of millions of dollars in sales. Darlene, welcome.

Thank you, Elizabeth. I'm happy to be here.

So, wow, those are some seriously amazing numbers. You didn't get to that level overnight, I suspect. Can you tell us a little bit about your story, Elizabeth?

You don't know the half of it. That is so true. I actually started back in 1991, and I bought my first house in a neighborhood north of Atlanta, Georgia. It was in a suburb of Atlanta, and it actually was a duplex, and it was a HUD home, as we call it. The HUD home is a program from HUD where FHA loans go into default, they get foreclosed, and then HUD takes the property back. And they had a great program that you could buy the property with $100 down. And so I was so excited. I was really young, in my early 20s, knew nothing about the business. And it actually started I had read a book called Think and Grow Rich by Napoleon Hill.

Yeah. Oh, a classic. Yeah, absolutely.

And that led me to their Nightingale Conant, that sells you all kind of marketing and sales motivational tapes. And then I got online and heard of Carlton Sheets, you know, the midnight infomercials, and buy houses with nothing down.

Of course, nothing down.

Right.

That didn't really happen. But then it took me about a year of research and I Found this HUD home, and I lost several offers on houses I really wanted and ended up bidding higher than the asking price. And I won the deal. And it was a program that you had to move into it. So my husband and I at the time, he said, we'll just move into it for six months. Well, it took us two and a half years to get out.

Wow.

We rented out the one side, we moved into the other side. Two babies later, we bought our next house, and it was a va foreclosure. Elizabeth it took me three years to buy my first three houses. That's the point of the story there. No, these numbers that I think today did not just come to me easily. It's over a long period of time and a lot of education and a lot of trial and error.

So just for our listeners, not everybody is in the real estate world.

So HUD stands for the Housing Urban Development.

Okay.

It's a government arm. And so they have a lot of different programs to make it easy for people to have home ownership.

Okay, terrific. And so over your first several years, you were at one house every couple of years. How did you get to this volume, this scale? What was the magic that happened?

You know, it's funny because I actually teach real estate investors now, and I would never have imagined myself in front of the class teaching. And it was really, when I look back, I can see the patterns that took place. And one, it's a lot of education. Two, it's a lot of building your network, building your dream team. And in the third or fourth deal, we started partnering with some other folks, and they brought something to the table that we didn't have. And so one thing led to another. One of my best friends in the business actually introduced me to a women's small women's investors group. It was part of the Georgia rea, which is the local real estate investors association. And that little women's group is what got me into my comfort zone to be able to sit down and tell people I had no idea what I was doing. And how did I learn what I needed to learn? It led to. Well, from there, there's another landlord class, and then there's another buying strategies class, and then there's how to find houses and how to do property management. And so these little groups, you know, over time, all that education came together. I know. I didn't say that. Way back when, though, I had sold Encyclopedia Britannica for five years.

Wow.

So my sales training was school of hard knocks, selling encyclopedias before I ever got to Real estate. And then it was teaming up with other people that knew things that I didn't know. And we just worked together in one deal after another. And that really got me to the middle ground. I actually bought my first house in 91. I got my real estate license in 1994 to help me with that learning curve as well. And then I never intended to use it for profit or work with the public. But fast forward, about eight to ten years later, I did end up using it as a revenue stream as a real estate agent at the time.

Yeah, there's so many really cool components to what you said, like leveraging your local group, building your education, the school of hard knocks on sales. I mean, like those are all. If you were to tell somebody, okay, you know, in 15 years you're going to be doing a massive amount of deals with a massive amount of numbers, you know, but Here are the 55,000 steps you have to take. You know that you'd be way too daunted to even try, but your thirst for knowledge, that evolution, that decision to partner with other people in those ways led a really amazing path for you.

Yeah, it really did. It's somewhat of a ministry for me as well. Somewhere along the way, probably about 15 years ago, I started getting into foreclosures. And it was an opportunity to really be able to help people. So on one hand, as a real estate investor, it's exciting to know that there's all these foreclosures. But on the other hand, it's sad and depressing to know how many people, how many families lose their homes because of foreclosure. And so, you know, just financial downfall. And so there are ways to work with families to help them stop the foreclosure process. And I spent a long time, few years just in that mode of helping people stop the foreclosure. And in doing that, there's a lot of real estate that comes around that. So they send you real estate in other ways. One way or the other, they end up having to move. And so there were opportunities for me to help them go rent a house, you know, or sell their house before the foreclosure.

Yeah, I love that. Looking at how to build that network and actually do the right thing for people. You can never go wrong if you're actually doing things that help others.

It sounds like it's true. In my life and my family, my friends, my church, I say, everything leads to real estate, everything leads to real estate. And people laugh. I said, no, it's true.

It's Totally true.

I feel like that's the case of it. And we talked about the fact that I actually do a little bit of teaching out there and mentoring, and I just start from where the person is, and it all leads to real estate. You know, we can go backwards to whether they're a nurse or an athlete or an IT professional or an accountant or an engineer. From there, I can give them a path to real estate. And it's so exciting. It's so interesting because it's so individualized.

Yeah. And.

Well.

And everybody needs shelter. So one of the things that you talked about is the fact that you're in Atlanta and that you've done a lot of deals in Atlanta, but to hit these numbers, you must be outside of the area of Atlanta as well. What areas or cities do you focus on?

Atlanta is my headquarters, and I actually have corporate offices here in Atlanta. And we do business in Houston and Dallas, Texas. We literally go to the foreclosure auctions there, and we buy, fix, and flip houses. We also do buy and holds where we do property management. Finding tenants. Many areas in Florida, Several of those markets like Tampa, St. Pete, Orlando, Jacksonville. We're talking about expanding into south Florida this year. Also throughout the Southeast, several cities in the southeastern United States, and also Delaware, Indiana, Kansas City. It's interesting. It's a very scalable business. So part of what puts me in the position that I'm in today, which is with a lot of fund managers or hedge funds, a lot of investors that have deep pockets and need help, is that I have efficiencies, and I could put a system in place, and that system allows us to take and do this anywhere that the economic market has a downfall or is up and coming, depending on real estate. Has these cycles, and you can do this business. Once you understand those cycles, you can do this business in any market.

That leads me to a couple of questions. When you're talking about your team, but then you're talking about, like, flying to places like Houston, do you have local teams on the ground in all of these cities, or do you just have a network of people that you're engaging with on a regular basis and you've.

Built a trusted relationship.

Yeah. So a little bit of both. We actually.

Goodness.

We have made the headlines in all the major newspapers back in 2013, where we were one seller selling the biggest single family house package to one buyer, and that was with Blackstone. Like I said, it made the media with $105 million worth of houses.

Oh, my gosh.

And so in that particular case, believe it or not, we sold them 1800 houses that year, but that was 1362 houses, Elizabeth. It took 10 days from contract to closing, which is miraculous. That was all every one of those were in Atlanta, Georgia.

I just. And I'm just like, completely floored because, you know, for somebody like me who's. I would consider myself a seasoned investor.

Right.

You know, and I've got 50 doors, and you're like, yeah, in 10 days, we sold, like, 1300 house. I mean, like, these numbers are just phenomenal. That blows my mind.

And they were all rented. So we had bought them, renovated them, placed tenants in them, and was managing them. So what Blackstone was doing was buying stabilized assets, and so we actually had to have them rented to get sold. It only took us about 18 months to buy all those houses in Atlanta.

Wow.

But anyway, that brings me to the part of the answer that you're asking. So we had grown to the point that we had lots and lots of employees, but we also had a huge network outside of our employee network. And then as we took that to Houston and Dallas, as we take that to Florida and Indiana and Kansas City, I build a network of brokers that we do business together with, and then we build a network. We plant some of our own boots on the ground for the renovations, and then they're responsible for finding those folks that are local. You know what I mean? Because you just can't bring everybody in. It's too expensive.

Yeah, no, that makes sense.

We work in any major metropolitan area and develop relationships with people who are local and know the market better than we do.

That's really good advice. I mean, it's important to have your own team. But I love what you're saying about building that trusted relationship with networks. I know that's something that Jason Hartman talks a lot about. It's the fact that you have to have a network of people that you know and trust, and you get that information by interacting with them on a regular basis, you know, getting a lot of references, checking those references, lots of face to face. So I can imagine you're spending a lot of energy building. Building that broader network. I mean, but that's really. That's really very exciting.

It is exciting.

Yeah.

So one of the things that you mentioned was, you know, selling to hedge funds. So are hedge funds your only customer or who's your. Who's your primary customer?

No, actually, it's interesting because it started a lot smaller. You know, once you get into real estate investing, it's almost addictive. And you do one deal, you do another deal. And when you get mortgages, you get limited to how many you could do. And so then you start talking to your family and your friends, and everybody says, I've got money in my IRA, or I've got Uncle John's got $300,000. Why don't you talk to him? So you start with your warm market. ELIZABETH and then from there. We had actually, probably back in 2009, a huge Florida investor group that called on us. They had heard about us, and they called us. At the time, we were only in one county in Atlanta, Georgia, way back then. And they had called on us, came up, and we wined and dined and drove the area, drove the properties, and they decided to start with a million dollars. And so we start into a second county, we start buying now in two counties for one outside investor that we didn't even know. So I would call him an out investor. And then from there he grew to the $5 million mark. And we turned their money three times a year.

Oh, my gosh.

So their annualized returns were 30% plus. I mean, it was phenomenal. And all we were doing was buy, fix and flip and on and on. And so then I work with a lot of local investors, and so the local investors tend to be the smaller fish, and then the out of state investors would be the next phase up, and then international investors. You know, I think it's common knowledge for a lot of folks that it's a good thing to put your money into the United States. You know, dollars make sense rather than whatever currency they're in. And so we had several countries that were starting to invest over here. We helped them, we helped develop their entities and do buy and hold. And so we had international investors, and then we got on the platform with the money managers and we told them that single family homes were going to be the next asset class. So that's probably about 2011 at that point. So one of the guys on our team actually got up on a panel of experts with fund managers, and nobody was doing single family homes at the time. And we did a dog and pony show. You know, we had our before and after slideshow going on in the hallway while, you know, the guys were up there in their seminars. And so, short period of time later, all of a sudden, Wall street hit the single family market. So we were at the right place at the right time, and those funds started to call on us. So it was only about, you know, it was after several years into the business with smaller Investors that the hedge funds really got involved with what we were doing. So we called them propos and opcos. We were the operating company, we did all the operations, and they held all the properties as far as the titles.

Sounds like things fall into kind of two categories. There are people in which you're doing the buy, fix, flip activity, and then there's the buy fix. Get a tenant in, handle the property management. So do you do both today or do you just focus on one of the two areas?

No, I do both today. And so the wealth building really comes from the buy and hold. So when you're looking for somebody who really is securing their future and building their wealth, it's not buy and flip. You know, buy and flip is another job that every time you flip one flip another one, you get a lot of residual benefits from the buy and hold. So a lot of white collar investors are looking for passive wealth building. And so we build those rental portfolios that way.

We talked a lot about, about how you help other people get their assets, build their portfolio. What about you? How do. Do you do the same thing? Do you do the flip or do you actually hold or what does your portfolio look like today?

So thank you for asking that. From 1991 till about 2001, I primarily did my own business, and that was buy, fix and flip as well as buy and hold. I'd say one of the things you look back and say, do you have any regrets in life? I regret that I sold every property in Gwinnett county that was one of my favorite places in Atlanta. I wish I owned every house I ever bought in Gwinnett, and there were several of those. But I flipped out of those portfolios and today getting started again. I've got two daughters, both are in their mid-20s. One is an artist, and I finally got her convinced to come back over to real estate. Good job, mom.

So she and I have just started in the last couple years building our portfolio. So we do have a couple rentals of our own. We're on our second personal flip in the past 12 months. So we've got that one, we bought it, we fixed it, we put it on the market. We have it under contract and hope to close on that one in the next three weeks.

That is seriously cool.

I love the fact that you've not only done this amazing arc of activity for you and your customers, but you're really helping your family grow along that path today. And I think you're right when you say that it's addicting. It really is. Once they totally get the real estate bug, they're going to be in it for life.

I know it well. It is an amazing opportunity from an investing standpoint. You know, people don't realize we hear a lot about it, especially in the last decade. You hear a lot about real estate and investing and how it's a great thing, but you can write your ticket with real estate investing. It takes a lot of education or it takes the right team together. But once you understand the dynamics of it and compound interest and how to get annualized returns that you can't get from any other investing, you'll be hooked.

Yeah, absolutely. And I think it's in the Millionaire Next Door. They basically talk about two ways to become a millionaire. One is to sell your. Your business, your personal business, and the second is to own real estate. And you're right. Jason would say it's the most favored asset class. It's the most tax favored asset class. And it's just. It is. And it's amazing how it can really help you do so much. And all roads lead to real estate. So one of the things that you'd mentioned before in this conversation was teaching your real estate investing strategy class. Can you tell us a little bit more about that? You know, some of the highlights and how people might be able to actually participate in your classes?

I just recently started putting it on meetups. So it's now a meetup group under Real Estate Investing, and it is a subgroup of Georgia ria, which is the Real Estate Investors association here in Atlanta. At one time, that was the largest one in the country with over 3,000 members. It's a nonprofit, and it's a strictly volunteer operation. So once a month, it's the third Wednesday of every month, I volunteer this class, and it's Real Estate Investing Strategies. It's on Wednesday night. And my structure is such that I make people participate and I tell them, I said, look, you know, Atlanta traffic, Elizabeth, is no fun. We're all tired, especially, you know, to get across town. It's very unique here. We drive across two, three counties, what we do every day. So I said, look, I'm tired, you're tired. There's no reason to be here and sit in the class. So what's your goals? You know, so I try to find out what people's goals are, and then we take it from there. So sometimes we structure a contract, sometimes we'll get on the Internet and we'll go on on the MLS or on Zillow, and we will drill down and say, hey, Look, I found this address. It's vacant. What do I do next? You know, so we'll take it into real estate investing strategies. And what's exciting is that everybody has an opinion. And so I allow everyone who wants to share to share opinions. And sometimes there are people that know more about certain things than I do. And so it's a really nice forum to know if you have any goals or you want to break into this business to be in that kind of environment. That's the free class. I've also done boot camps twice a year for over 10 years for Georgia RIA. And we literally get together for three long days, which is why we call it a boot camp. And day two, we take a bus tour. Elizabeth we take a bus tour out to anywhere from five or six houses and look at what it would take to renovate that house. Literally the cost of renovating, whether or not it's a good area to buy in, whether or not you should just rent it or try to sell it. We come back to class and we structure the deal. We talk about how do you figure out how to strategize on what's the maximum you should pay for that house? And that's one of my favorite. I teach that class, you know, through the boot camp. I facilitate it all weekend and then I do some individual classes there and then I teach a direct mail class in investing. Those are the three that I'm currently doing in 2016, 2017.

And just so that our listeners are aware, we're going to be posting the links to your classes and your information, your website. We'll be posting those in the notes for the podcast so people don't have to be as they're driving, trying to take notes about the names of these classes. We'll have that information available to them. I love the fact that you've got these hands on components to these strategy classes because you're absolutely right. People can listen all day long and how much are they actually retaining, you know, like you said, after they've got that two hour, you know, commute. So the fact that you're throwing this into a hands on experience where everybody's engaging and they're actually achieving components of their goal. I love that approach because it really helps sink it in.

Oh, me too. I'm totally into that type of education when it comes to real life, you know, needs. If you're trying to learn something like real estate, you've got to be involved.

One of the things that you mentioned above was that you had this passion for Mentoring and helping other people grow. You've got classes. What's your approach to mentoring? Who's a typical protege, and what's your approach to mentoring those folks?

Great question. Typically, I'll tell you, there's a couple different categories, and one of the biggest categories, people that come to my free classes talk about I want to leave my job. A lot of people just have this, I'm in the rat race and I want to get out. And I think real estate investing is going to get me there. And so that group of people is probably 50% of the people that I talk to as students or from a mentoring standpoint. And then on the other level, it's people, again, like I mentioned earlier, in the white collar side of the world that they make really good money at what they do. They're not trying to leave their profession, but they're trying to make their money work for them. And they don't want to put it in bank cd. They don't want to put it where they're not getting that much of a return. And they've heard that the millionaire next door is put your money to work in real estate investing. So I have the passive investor and then I also have the one that wants to do it full time. So my approach once again, and it's kind of funny, I guess it's just who I am. I'm a middle child. Everything I've ever done, I've been in the middle. And so I sit there in the middle with that person and I say, I honestly have to ask you a lot of personal questions for you to get the most out of this. And the personal question is, what exactly do you want? Do you want to spend your money? Do you want to spend your time? Do you want to do both? What are your goals? Are you looking for a cash flow type of investment, or are you looking to secure your future or you just want to get cash now? And so once we identify those extreme basics, then I'm going to take what they're bringing to the table. Elizabeth, you know, a nurse brings an entire world to the table from the medical industry versus, again, the engineer. The nurse is full of people skills. The engineer is full of black and white. The universe is black and white. And I don't see why I have to talk to people, obviously.

Stereotyping there. But the engineer probably is huge into systems and the nurse is huge in the people. And so I have to start there in order to get them where they want to be. I have to see what they're bringing to the table and then help them build from that. That's kind of where I come from. From a mentoring standpoint, I love the.

Component that you're talking about. It's like getting to the heart of what makes them. Them unique, Leveraging their background, and then trying to tie those up to their goals.

The crazy thing is, again, everything leads to real estate. And the funny thing is, again, I go back to 1991, I was such an introvert. I couldn't talk to strangers. I couldn't, you know, ask for a cup of coffee for free if I had to, you know. And so I have come such a long way, and I see people in my class daring the headlights, and I feel like I've got two fire hoses going at them at the same time. And I can just tell you that if you have the desire and want to build the passion, Everything leads to real estate. So whether you're coming from this world or this world, There's a path that goes right into real estate that way, and it's not above anybody. And that's what I love that. I think what makes me unique is that a lot of real estate agents live in this bubble in this certain part of the world, A lot of real estate investors. But there's a world where they collide and come together, and that's where I am.

Right.

Yeah. No, I like that. I like that. I'm here in seattle and in the Seattle market. The market is a little insane right now, and flipping is a really high risk business right now. Unless you're well outside of the core of the metropolitan area. In atlanta, are people still able to flip? I know that the market really bounced quite a bit there, but what's the market like today? Are people able to still flip successfully in the larger Atlanta area?

Yeah, there's a lot of flipping going on in atlanta. The gold is in the inventory. We are at a shortage of inventory in atlanta. So we went from the last decade being some of the highest foreclosure numbers in the country to now having some of the lowest foreclosure numbers, meaning the number of homes going into foreclosure. So if you have any skills of being able to lift up those rocks and find houses that need to be sold, There's a huge market. We don't have the inventory, but we have the demand. The population in atlanta continues to increase, so I'm seeing building coming on very strong right now, and I think that will happen at least for the next three or four years. In an area like Seattle, there's other creative strategies that you would have to use, you know, to do real estate investing there. And sometimes it's just a matter of controlling but not owning the real estate. So depending on the market, again, there's a place, no matter what the market looks like, there's a place for real estate investing. You just have to be willing to spend enough time in your education or build the team that you need. You know what I mean? That your weakness is covered by someone else on the team and that's their strength. Understanding. In a risky market, you may not want to be flipping.

Right.

You may want to be building the wealth or building the cash flow instead.

Yeah, no, that's really great advice because you've been living this for several cycles, if you will, through the real estate market just in general going up and down. Do you have any predictions about how you think the real estate market's going to go in the next two to five years? Do you have any gut feeling for where it's going?

I do. I really feel like we are still in a very strong seller's market in a lot of pockets. You know, being that we've been in so many different metropolitan areas, I get to see the ups and the downs and in the different, whether it's in the Southwest, the Southeast, the Northwest, the Midwest. What I've seen is for the most part pretty strong.

A couple years ago, right after Wall street hit the single family market, we had the strongest buyer and seller market at the same time. And that's so unusual to see. And now I feel like we've morphed into. We have a very strong seller's market in most of our markets. And that's because most of the inventory has been wiped out. Most of the distressed inventory has been wiped out. So I still think that in the next couple of years, probably 18 months at least, we'll see a strong seller's market as the interest rates, they're only starting to climb. We've been threatening this four to six years, but they've only started to climb. So in your first time homebuyer market, it doesn't affect them so much. They don't think that deeply in your market. When you have a more savvy investor, finance minded individual, as you see that climb, maybe in phase two, if you were going to make decisions, then you're going to buy houses before that really hard. What I don't know what's going to happen, Elizabeth. I don't know how we get to that strong buyer's market where some kind of crash happens. I feel like we're probably at least four years out, if not longer from a major crash. That's what I think. I can't predict the elements that's going to cause it.

You know, that's true. You just. You can't predict it. And in hindsight, when you look at the cycles, you go, well, duh, all the signs were there. But when you're in it, it's really hard to see. I agree with you. You know, to see shortage of inventory, particularly in the larger metropolitan areas and just really hungry investors. And in particular, like you were saying, those international investors really are, you know, aggressive in getting a lot of the inventory where they can see those deals coming. So we've got a lot of people wanting to buy and, you know, continuing to have a challenge with that inventory as a whole. But I loved what you said. I loved what you said when you said there's always ways to make money. You just have to figure out the approach. And I'm not quoting you properly, but, you know, figuring out the appropriate approach for that particular situation and your particular goals. Because like you said, there's a lot.

Of different ways to make money in real estate.

Understanding the cycle and where you are in the cycle, what your metropolitan area, that's number one important thing. The number two is the right education. So sometimes we may throw out some stock market advice, but don't throw the baby out with it. Listen to the advice, but don't put your money in the stock market necessarily, so that you could learn a lot. You know, that education, you have to devote so much time a week, whether it's three hours or three sittings or whatever it might be, study the economy, study the world events, just know what's going on and you're going to see some things out there. The fact that Wall street is in the single family business, there's a lot of education on the Internet. And when you learn who those leaders are, and again, in my opinion, Blackstone is the one to watch when they move. They are absolutely first in when they move, something moving, something's happening.

Yeah.

And so if you could study and learn what they're doing. I'm not saying necessarily do what they do because they have lots and lots and lots of zeros at the end of what they do, but at least watch it and learn from it.

Really sage advice there, because you're right. Watching those industry leaders and taking their lead and not necessarily duplicating. Right. But learning from it. And the other thing that I thought was really smart that you called out is the fact that you've just got to put in the time. It's a matter of it's great that you have an interest, but if you're going to be successful, you've got to put in the time. Reading, understanding, reading websites, talking to people, building networks, building teams. It's not hard. It just takes diligence.

Yes, it does.

So, Darlene, is there anything else that you wanted to talk about that we haven't covered today? This has been a fascinating conversation for me. I'm sure the listeners would feel that way too. But is there anything else that you wanted to make sure that we knew about?

Well, thank you, Elizabeth. I'm so excited to be on here with you. One of the things, it's funny that, you know, this is a focus on women and when I first started there weren't very many women in this business at all. I mean, there were a lot of women that were realtors but not on the investing side. And I'm very biased, I have to tell you before I make this statement, but women sometimes are real good students, a lot better students at a process than men are sometimes. So I say I'm biased that way is if our listeners are really interested in getting into any form or fashion of real estate investor, the first thing I want to say is caution. It's so easy to find your way into an area on the Internet, but to really know whether those numbers are real. There are a lot of wholesalers out there and a lot of people out there that are going to sell you billed goods. You just have to know if it sounds too good to be true. You know what they say? It probably is, but not always. There are some grand slams in the real estate investing business and there are a lot of home runs. But you have to know that you know the market or somebody that is advising you knows that market before you accept the value of that property or how much you think you can rent it for. You need somebody on your team that is local investors who know me know that I buy houses without me personally going there, but somebody on my team goes there and I've been there. I don't suggest anybody doing this without knowing enough. So you either. What I would want the listeners to know is it's exciting and there's a lot of money to be made. However, there's a lot of money to lose if you don't do it right. And so you have to align yourself with the right people who have the skill set and have the reputation that you need to help you in those areas that you don't know. So if you've got a lot of money in your IRA or you've got a lot of money that you want to invest, you don't just put it out there unless you have the confidence in the other side of your team. So one of the things for me it goes back to I'm really good at the operations side of this business. From the financial side, I'm limited to the amount of deals that I can do. So I have to constantly take on partners that can put the money into the deal. I can show you the background, you know what I mean? So before somebody gets on board with another investor or partner, they have to see that background. The other one is joint ventures on buy and hold. I don't know if you mind if I just quote the Bible says that we need to be equally yoked in life and that means to be like minded. And the same thing is true in real estate investing. If you don't know a person well enough, you should not joint venture on a buy and hold together.

Just so that all the listeners who may not have heard this term before understand what a joint venture is. Can you describe that a little bit?

Yes. So a joint venture as it relates to real estate investing simply means putting two different parties together on a partnership. So in some cases it could be one particular house. Let's buy 123 Main Street. Let's buy it, fix it and flip it. So I'll put in the sweat, you put in the money. I'll put in the expertise, you put in the money. Typically it's a money partner and somebody who does all the operations. That's typically the joint venture that comes together on a bigger scale. A joint venture is two parties or a group of people that come together and form an entity such as an llc. And the purpose of that entity is buy and hold for three to five years and then flip it. Or buy and hold or buy 10 assets in the next 12 to 15 months, fix them and flip them. It has very specific goals and you should have very specific what if statements. What if it doesn't form the way it's supposed to? Then what can one person buy out the other? So joint ventures, typically you should have some type of real estate attorney that can advise you, also can help you develop the paperwork or at least evaluate the paperwork and tell you if you're protected in it. There are a lot of fantastic people in this business, but their contracts are one sided. And guess whose side it protects. Yeah, not the new person coming on board.

Well, this goes back to your caution statement too. You really, you need to know what you're doing or you need to work with people who know what they're doing. You should assume good intent but do your due diligence too. So, Darlene, can you give out your website so that people know how to, how to get in touch with you?

I would go to www.darbyshouses.com and that's D A R B U Y S H O U s e s darbyes houses.com and I have actually a couple click. It's on there. You could click and put in an investor profile and tell me who you are and what your goals are. And we could do a, you know, just a free 30 minute phone consultation and just say, hey, I'm in Seattle and I'm thinking about investing in Chicago and what do you think about that? And typically that consultation, like I said, I'm just more than happy. Most of my mentoring is giving back and I'm more than happy to help people get off to a good start in this business.

That's terrific, Darlene. Thank you so much. So, Darlene Coquerell, real estate broker and CEO of Key Properties and KDH Realty, thanks so much for joining us on the Women's Investing Network podcast today.

Thank you, Elizabeth. It's been my pleasure.

Thank you so much for listening to the Women Investing Network. Be sure to subscribe, rate and review the show on itunes or the platform of your choice. You can find the show notes and resources for today's episode@womeninvestingnetwork.com remember that guest opinions are their own and information is of general nature, so be sure to consult appropriate tax, legal or other professionals for specific advice.